MacQueen v. Union Carbide Corporation et al

Filing 512

REPORT AND RECOMMENDATIONS recommending granting D.I. 243 MOTION to Dismiss for Lack of Jurisdiction Over the Person filed by Huntington Ingalls Inc. Please note that when filing Objections pursuant to Federal Rule of Civil Procedure 72(b)(2), briefing consists solely of the Objections (no longer than ten (10) pages) and the Response to the Objections (no longer than ten (10) pages). No further briefing shall be permitted with respect to objections without leave of the Court. Objections to R&R due by 12/22/2014. Signed by Judge Christopher J. Burke on 12/3/2014. (dlk)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
MARGUERITE MACQUEEN,
Individually and as the Surviving Spouse
of DAVID MACQUEEN, deceased,

)
)
)
)

Plaintiff,

)
)

v.

)
)

UNION CARBIDE CORPORATION,
et al.,

Civil Action No. 13-831-SLR-CJB
Consolidated

)
)
)

Defendants.

)

REPORT AND RECOMMENDATION
Presently pending before the Court is Defendant Huntington Ingalls Incorporated's ("HII"
or "Defendant") Motion to Dismiss for lack of personal jurisdiction, filed pursuant to Federal
Rule of Civil Procedure 12(b)(2) (the "Motion"). (D.I. 243) For the reasons set forth below, the
Court recommends that Defendant's Motion be GRANTED.

I.

BACKGROUND

A.

Factual Background
1.

The MacQueens

Plaintiff Marguerite Mac Queen ("Plaintiff') is acting individually as administratrix of the
estate of and as the surviving spouse of decedent, her husband David MacQueen. (D.I. 380 at 4)
Plaintiff is a resident of Jackson County, Missouri. (Id.) Before passing away from lung cancer
allegedly caused by asbestos exposure, Mr. MacQueen was also a resident of Jackson County,
Missouri. (Id. at iTiT 1, 14)
The United States Navy employed Mr. MacQueen from 1956 to 1960. (Id. at iT 11)
During his Naval employment, Mr. MacQueen was allegedly exposed to asbestos while stationed

aboard the attack aircraft carriers U.S.S. Randolph and U.S.S. Independence. (Id.)

2.

HII

Defendant HII is a Virginia corporation with its headquarters in Newport News, Virginia.
(Affidavit of Michael J. Helpinstill ("Helpinstill Aff."), D.I. 243, ex. 1 at iii! 1, 5) The company
now known as HII was incorporated in Virginia in 1886 as Newport News Shipbuilding and
Drydock Company, and went by that name for many years. (Id. at if 3) On December 2, 2008,
Newport News Shipbuilding and Drydock Company changed its name to Northop Grumman
Shipbuilding, Inc. (Id.) Thereafter, on April 14, 2011, Northrop Grumman Shipbuilding, Inc.
changed its name to HII, the name by which the company is now known. (Id.) According to
Plaintiff, Newport News Shipbuilding and Drydock Company (the name by which HII was
previously known) built the U.S.S. Randolph in Newport News, Virginia. (D.I. 256 at 2) 1
HII is a shipbuilder that supplies ships to the United States government, and does so
through its two unincorporated divisions, Newport News Shipbuilding Division and Ingalls
Shipbuilding Division. (Helpinstill Aff. at if 6) HII performs its shipbuilding and manufacturing
activities in Virginia, Mississippi, and Louisiana. (Id.) HII has never done business in Delaware,
has never been licensed to do business in Delaware, has never held any assets in Delaware or
kept any bank accounts there, has never marketed its products in Delaware, has never sent agents
to Delaware to conduct business, has never designated an agent for service of process in
Delaware, and otherwise has never had any other meaningful contact with Delaware. (Id. at iii! 7-

Plaintiff asserts that the Court can take judicial notice of this fact, and in support
of the fact's existence, cites to a Naval treatise, though she does not provide an excerpt of that
treatise as an exhibit. (D.1. 256 at 2 & n.2 (citing RAYMOND BLACKMAN, JANE'S FIGHTING SHIPS
1972-73 (1973)). In any event, Defendant does not contest the accuracy of the factual statement,
and for purposes of this Report and Recommendation, the Court assumes it to be accurate.
2

14)

3.

The Newport News Shipbuilding Entities

On June 16, 1965, an Delaware corporation known as Dixemer Petroleum Corporation
("Dixemer") was formed. (D.I. 256, ex. 3 at 6; Affidavit of Michael J. Helpinstill ("Helpinstill
Aff. II"), D.I. 258, ex. 1 at~ 4) Dixemer later changed its name to Tenneco InterAmerica
("Tenneco"). (Helpinstill Aff. II

at~

4) In November I 986, Newport News Shipbuilding and

Drydock Company (the entity that would later become HU) became a subsidiary of Tenneco; in
October I 996, Tenneco changed its name to Newport News Shipbuilding Inc. ("Newport News
Shipbuilding-I"). (Id.) Thus, Tenneco (later Newport News Shipbuilding-I), a Delaware
corporation, was HII's parent as ofNovember I986. (Id.)
In November 2001, Newport News Shipbuilding-I merged into a Delaware corporation
known as "Purchaser Corp. I" (a corporation that itself had been formed in October 200I). (Id. at
~

5; D.I. 256, ex. 3 at 9) In January 2002, Purchaser Corp. I changed its name back to Newport

News Shipbuilding Inc. ("Newport News Shipbuilding-2," and collectively with Newport News
Shipbuilding-I, "Newport News Shipbuilding") (Helpinstill Aff. II

at~

5) And so, HHI went

from being a subsidiary of Newport News Shipbuilding-I (through November 200I) to thereafter
becoming a subsidiary of Newport News Shipbuilding-2. (Id.)
To support her arguments regarding personal jurisdiction, Plaintiff provided a press
release attached to an October 200I Schedule I4D-9 Statement that "Newport News
Shipbuilding Inc." filed with the Securities and Exchange Commission (the "October 2001 SEC
Filing"). (D.I. 256, ex. 2) In that press release, which was issued to announce that the company
had decided not to merge with General Dynamics, Newport News Shipbuilding Inc. states that it

3

"designs and constructs nuclear-powered aircraft carriers and submarines for the U.S. Navy and
provides life-cycle services for ships in the Navy fleet" and that it "employs 17 ,800 people and
has annual revenue of approximately $2 billion." (D.I. 256, ex. 2 at 8)

4.

September 2007 Merger and HU Today

In September 2007, Newport News Shipbuilding-2 merged into HII, and HII thereafter
continued to operate as Virginia corporation, as it had since 1886. (Helpinstill Aff. II at iii! 5, 12;
D.I. 256, ex. 1 at if 3) Huntington Ingalls Industries Inc. ("HI Industries"), a company
incorporated in Delaware on August 4, 2010, is currently the parent company ofHII. (Affidavit
of Michael J. Helpinstill ("Helpinstill Aff. III"), D .I. 197, ex. A at if 3)

5.

The Second Newport News Shipbuilding and Drydock Company
Entity

In addition to the fact that HII's previous name was Newport News Shipbuilding and
Drydock Company, later, a separate entity was incorporated under the same name. (Helpinstill
Aff. at if 3; D.I. 256, ex. 3 at 3) On December 5, 2008, that second entity named Newport News
Shipbuilding and Drydock Company was formed as a Delaware corporation. (Helpinstill Aff. II
at if 7; D.I. 256, ex. 3 at 3) This entity was formed for the sole purpose of maintaining the
"Newport News Shipbuilding and Drydock Company" name (since that name, which had been
previously used by the entity that is now known as HII, was no longer in use as of December 2,
2008). (Helpinstill Aff.

if 3; Helpinstill Aff. II at if 8) This new Delaware corporation does not

manufacture any products, does not control or operate HII, has never held HII' s assets or
liabilities, and is not in any way a reference to HII. (Helpinstill Aff. II at iii! 9-12) In other
words, its only connection with HII is that it bears the same corporate name that HII did from
1886 through December 2, 2008.

4

B.

Procedural History

On March 28, 2013, Plaintiff filed an asbestos-related personal injury action against 55
Defendants in the Superior Court of the State of Delaware. (D.I. 1, ex. 1) On May 10, 2013,
Defendants Crane Company and Elliott Company filed respective notices ofremoval of the case
to this Court. (D .I. 1)2 This consolidated case was later referred to the Court by Judge Sue L.
Robinson on September 11, 2013, for the Court to "conduct all proceedings ... [and] hear and
determine all motions[], through and including the pretrial conference." (D.I. 152)
One of the Defendants sued in the original Complaint was HI Industries, which Plaintiff
listed in the Complaint as "Huntington Ingalls Industries f/k/a Newport News Shipbuilding[.]"
(D .I. 1, ex. 1) The Complaint was later amended by the filing of a "Second Amended
Complaint[,]" (D.I. 105), and in response, HI Industries filed a motion to dismiss pursuant to
Federal Rule of Civil Procedure 12(b)(6) (the "the Rule 12(b)(6) motion to dismiss"), (D.I. 197).
In the Rule 12(b)(6) motion to dismiss, HI Industries argued that Plaintiff had apparently
intended to sue HII, but instead had sued the wrong party (HI Industries); it asserted that there
was no basis to allege liability against HI Industries and thus, HI Industries should be dismissed
from the case. (Id.) Plaintiff, after failing to timely respond to this motion, (D.I. 200), eventually
did respond ("the Response") by acknowledging that it had, in fact, sued the wrong party and that
it had meant to sue HII, (D.I. 201). As a result, HI Industries was ultimately dismissed from the
action. (D.I. 212, 242)

2

Because these two Defendants filed two separate notices of removal, this Court
opened two separate actions, Civil Action Nos. 13-831-SLR-CJB and 13-835-SLR-CJB, both
entitled MacQueen v. Union Carbide Corp., et al. The actions have since been consolidated, and
Civil Action No. 13-831 has been designated as the lead case. Citations to docket numbers are to
documents that have been filed in the lead case.
5

In the body of the Plaintiffs Response to the Rule 12(b)(6) motion to dismiss, Plaintiff
also put forward a separate request for relief: what was, in essence, a motion seeking leave to
file, pursuant to Federal Rule of Civil Procedure 15(a)(2), a "Third Amended Complaint" in
order to substitute HII for HI Industries. (D.1. 201 at ifiI 2-5) Although noting that this request
should have been brought in the form of a stand-alone motion, the Court considered the request
as if it had, in fact, been properly filed by motion. (D .I. 213 at 3) HI Industries then challenged
Plaintiffs attempt to amend the operative complaint at that stage-arguing that amendment
would be futile, since personal jurisdiction did not exist as to HII. (D.I. 204 at 1-4). The Court,
noting the sparse record that existed as to that question, and citing to case law suggesting that
such challenges were better brought by way of a motion to dismiss pursuant to Rule 12(b)(2),
granted the Plaintiffs request and permitted it to file the Third Amended Complaint. (D.I. 213 at
5-6) In doing so, the Court noted that its "decision [was] made without prejudice to [HII] 's
ability to raise the defense of lack of personal jurisdiction in a later motion to dismiss, filed
pursuant to Rule 12(b)(2), if it chooses to do so" and offered "no opinion at this time on the
merits of such a motion." (Id. at 6) The Third Amended Complaint was then filed on April 1,
2014, with HII now listed as a Defendant. (D.I. 217)
HII then filed the instant Motion. (D.1. 243) In its responsive brief, Plaintiff contends
that she has made a sufficient showing to warrant denial of the Motion, or, in the alternative, that
the Court should permit jurisdictional discovery of HII on the question. (D .I. 256) The Motion
was fully briefed on June 30, 2014. (D.I. 258) 3

Plaintiff, without objection, later filed a Fourth Amended Complaint to correct
certain other minor inaccuracies in the case caption. (D.I. 364, 370, 380) The Fourth Amended
Complaint too lists HII as a Defendant. (D.I. 380)
6

II.

STAND ARD OF REVIEW
A.

Personal Jurisdiction

When a defendant moves to dismiss a lawsuit for lack of personal jurisdiction, the
plaintiff bears the burden of showing the basis for jurisdiction, and must make aprimafacie
showing that personal jurisdiction exists. See Power Integrations, Inc. v. BCD Semiconductor

Corp., 547 F. Supp. 2d 365, 369 (D. Del. 2008); see also Hardwire, LLC v. Zero Int'!, Inc., Civil
Action No. 14-54-LPS-CJB, 2014 WL 5144610, at *5 (D. Del. Oct. 14, 2014). In reviewing a
motion to dismiss for lack of personal jurisdiction, the Court must accept all of a plaintiff's
factual allegations as true and construe disputed facts in its favor. Round Rock Research LLC v.

ASUSTeK Computer Inc., 967 F. Supp. 2d 969, 972 (D. Del. 2013); Power Integrations, 547 F.
Supp. 2d at 369; see also Hardwire, 2014 WL 5144610, at *5.
In order to establish personal jurisdiction in the face of a challenge like that at issue here,

a plaintiff must adduce facts sufficient to satisfy two requirements-one statutory and one
constitutional. Hardwire, 2014 WL 5144610, at *6. In analyzing the statutory prong, the Court
must consider whether the defendant's actions fall within the scope of Delaware's long-arm
statute. Id.; Power Integrations, 547 F. Supp. 2d at 369. In analyzing the constitutional prong,
the Court must determine whether the exercise of jurisdiction comports with the defendant's
right to due process. Hardwire, 2014 WL 5144610, at *6; Power Integrations, 547 F. Supp. 2d
at 369 (citing Int'! Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)).

B.

Jurisdictional Discovery

As a general matter, ''jurisdictional discovery should be allowed unless the plaintiffs
claim [of personal jurisdiction] is 'clearly frivolous."' Mass. Sch. of Law at Andover, Inc. v. Am.

7

Bar Ass'n, 107 F.3d 1026, 1042 (3d Cir. 1997) (citations omitted); accord Toys "R "Us, Inc. v.
Step Two, S.A., 318 F.3d 446, 456 (3d Cir. 2003) ("Although the plaintiff bears the burden of
demonstrating facts that support personal jurisdiction ... courts are to assist the plaintiff by
allowing jurisdictional discovery unless the plaintiffs claim is 'clearly frivolous."') (citations
omitted). Any such consideration "begins with the presumption in favor of allowing discovery to
establish personal jurisdiction." Hansen v. Neumueller GmbH, 163 F.R.D. 471, 474 (D. Del.
1995). If a plaintiff makes factual allegations that suggest the possible existence of requisite
contacts between the defendant and the forum state with reasonable particularity, the court
should order jurisdictional discovery. See Eurofins Pharma US Holdings v. BioAlliance Pharma

SA, 623 F.3d 147, 157 (3d Cir. 2010); Power Integrations, Inc., 547 F. Supp. 2d at 369.
However, a court should not permit discovery as a matter of course; before allowing
jurisdictional discovery to proceed, "[t]he court must be satisfied that there is some indication
that th[e] particular defendant is amenable to suit in this forum." Hansen, 163 F.R.D. at 475;

accord Draper, Inc. v. MechoShade Sys., Inc., No. 1:10-cv-01443-SEB-TAB, 2011 WL
1258140, at *1 (S.D. Ind. Mar. 31, 2011) ("While courts have the power to grantjurisdictional
discovery, a motion to dismiss for lack of personal jurisdiction does not automatically trigger a
right to jurisdictional discovery."). If a plaintiff does not come forward with "some competent
evidence" that personal jurisdiction over the defendant might exist, a court should not permit
jurisdictional discovery to proceed. Hansen, 163 F.R.D. at 475 (emphasis in original). Put
another way, a plaintiff may not undertake a "fishing expedition based only upon bare
allegations, under the guise of jurisdictional discovery." Eurofins Pharma, 623 F.3d at 157; see

also Mass. Sch. of Law, 107 F.3d at 1042 (noting that a mere "unsupported allegation" that the
prerequisites for personal jurisdiction have been met would amount to a '"clearly frivolous"'
8

claim, and would not warrant the grant of jurisdictional discovery) (citations omitted).

III.

DISCUSSION

A.

Personal Jurisdiction

As is noted above, in the face of a challenge to personal jurisdiction, the Court must first
assess whether Plaintiff has made aprimafacie showing that HII's actions fall within the scope
of Delaware's long-arm statute and of constitutional due process.
1.

Alter Ego Theory

In the Fourth Amended Complaint,4 as to HII, Plaintiff makes reference to the long-arm
statute, Del. Code Ann. tit. 10 § 3104(c) (2010 Supp.) ("Section 3104(c)"), only once, when it
asserts HII "is a foreign business entity doing business in the State of Delaware and subject to
service of process pursuant to 10 Del. C. § 3104 (c)[.]" (DJ. 380

at~

4) The Fourth Amended

Complaint also asserts, as to personal jurisdiction over HII, that "jurisdiction against [HII]
including [sic] is predicated on the fact that [it] supplied a ship which [it] knew or should have
known would travel throughout the world including but not limited to Delaware." (Jd.) In her
responsive brief, Plaintiff never once makes reference to the long-arm statute, nor to case law
regarding the Due Process Clause. (D.I. 256) Indeed, when stripped of its recitation of the
procedural history as to this issue, the brief contains very, very little substantive discussion as to
why Plaintiff has sufficiently demonstrated that personal jurisdiction exists. (Id.)
Indeed, Plaintiff makes only one argument in her brief that actually goes to that question.
Her argument is a multi-step one, and is as follows:

4

The content of the Third and Fourth Amended Complaints do not differ as to their
allegations regarding HII, and so for ease of reference, the Court hereafter will simply refer to the
content of the most recently filed complaint of record, the Fourth Amended Complaint.
9

(1) The evidence of record demonstrates that Newport News
Shipbuilding- I (i.e., the entity of that name, which was originally
named Dixemer, and then Tenneco, before becoming Newport
News Shipbuilding-I) was a Delaware corporation, and existed
from June 1965 through November 200I, and that Newport News
Shipbuilding-2 (i.e., the entity of that name, which was originally
named Purchaser Corp. I, before becoming Newport News
Shipbuilding-2) was also a Delaware corporation and existed from
October 200I through September 2007;
(2) Newport News Shipbuilding (i.e., both Newport News
Shipbuilding-I and then later Newport News Shipbuilding-2) were
at different times the parent corporation of HII (i.e., the entity of
that name, which was originally named Newport News Shipbuilding
and Drydock Company, and then Northrop Grumman Shipbuilding,
Inc., before being re-named HII) from I 986 through September
2007;
(3) Newport News Shipbuilding-2 was responsible for the October
200 I SEC Filing, in which it states that it "designs and constructs
nuclear-powered aircraft carriers and submarines for the U.S. Navy
and provides life-cycle services for ships in the Navy fleet[,]" (D.I.
256, ex. 2 at 7) in Newport News, Virginia; 5 and

(4) The October 200I SEC Filing is thus an "admission by
Newport News Shipbuilding[] ... that it is an alter ego of Newport
News Shipbuilding and Drydock Company [i.e., the entity that later
became HII, and which was manufacturing Navy ships in Newport
News, Virginia at that time]."
(D.I. 256 at 5 (emphasis in original)). In other words, Plaintiffs only argument as to why there is

5

In its reply brief, Defendant asserts that Newport News Shipbuilding-2 was the
entity that sent out this press release, which is dated October 26, 2001. (D.1. 258 at 2) Newport
News Shipbuilding-2 did exist as of October I I, 2001, though according to an affidavit
submitted by Defendant, it was then known as Purchaser Corp. I and would not come to be
renamed "Newport News Shipbuilding Inc." until January 2002. (Helpinstill Aff. II at~ 5)
Newport News Shipbuilding-I, however, was also still in existence as of October 26, 2001, and
would not merge with Purchaser Corp. I until November 2001. (Id.) Regardless, whether the
entity that issued this press release was Newport News Shipbuilding-I or Newport News
Shipbuilding-2 does not impact the Court's decision herein. For purposes of the discussion set
out herein, the Court will refer to Newport News Shipbuilding-2 as the entity that sent this press
release.
10

personal jurisdiction over HII is that Newport News Shipbuilding-2 was a Delaware corporation,
and since (1) personal jurisdiction exists over Delaware corporations; and (2) Newport News
Shipbuilding-2 was the alter ego of HII; then (3) personal jurisdiction exists as to HII too.
Delaware courts have "rather strictly" applied the alter ego theory of personal jurisdiction,
using an analysis similar to that used in determining whether to pierce the corporate veil.

HMO/Courtland Props., Inc. v. Gray, 729 A.2d 300, 307 (Del. Ch. 1999); see also Case Fin.,
Inc. v. Alden, No. 1184-VCP, 2009 WL 2581873, at *4 (Del. Ch. Aug. 21, 2009) (noting that
Delaware courts will only disregard the corporate form in the "'exceptional case'") (citation
omitted). In the cases when the alter ego doctrine has been applied, these courts have examined
the record for two critical elements:
1) that the out-of-state defendant over whom jurisdiction is sought
has no real separate identity from a defendant over whom
jurisdiction is clear based on actual domicile or satisfaction of
Delaware's long-arm statute; and 2) the existence of acts in
Delaware which can be fairly imputed to the out-of-state defendant
and which satisfy the long-arm statute and/or federal due process
requirements.

HMO/Courtland Props., Inc., 729 A.2d at 307-08; see also Reach &Assocs., P.C. v. Dencer, 269

F. Supp. 2d 497, 506 (D. Del. 2003) (looking to Delaware state law in assessing the applicability
of the alter ego theory as it relates to establishing personal jurisdiction over a defendant). 6 The
corporate veil is generally pierced only "in the interest of justice, when such matters as fraud,

6

The Court focuses below on the first element of this test-i.e., whether HII had no
real separate identity from its parent. However, it is worth noting that Plaintiff has pointed to no
specific acts taken in Delaware by either of the Newport News Shipbuilding entities (or HII),
other than the Delaware incorporation of the Newport News Shipbuilding entities, and there is
authority from our Court indicating that in such a circumstance, Plaintiff could not meet the
second element of this test. Reach & Assocs., P. C., 269 F. Supp. 2d at 506-07.
11

contravention of law or contract, public wrong, or equitable consideration among members of the
corporation, are involved." Pauley Petroleum, Inc. v. Cont'! Oil Co., 239 A.2d 629, 633 (Del.
1968); see also Applied Biosystems, Inc. v. Cruachem, Ltd., 772 F. Supp. 1458, 1463 (D. Del.
1991) ("Under the alter ego or piercing the corporate veil doctrine, courts will ignore the
corporate boundaries between parent and subsidiary if fraud or inequity is shown."). In assessing
whether to disregard the corporate form, Delaware courts look to whether there has been an
element of fraud, and also consider factors such as whether: (1) the subsidiary is adequately
capitalized; (2) it is solvent; (3) corporate formalities were observed; (4) a controlling
shareholder siphoned company funds; and (5) in general, the subsidiary simply functioned as a
facade for the controlling shareholder. Case Fin., Inc., 2009 WL 2581873, at *4; Sprint Nextel

Corp. v. iPCS, Inc., Civil Action No. 3746-VCP, 2008 WL 2737409, at *11 (Del. Ch. July 14,
2008). There are at least two reasons why Plaintiff has not properly invoked the alter ego theory
on the record here.
First, and at the most basic level, the invocation of the alter ego theory would not assist
Plaintiff, because Newport News Shipbuilding-2 (the entity that is said to have been the
corporate alter ego ofHII) does not exist, and has not existed since September 2007, when it
merged into HII. When courts assess whether there is personal jurisdiction over a party (e.g., by
engaging in a "minimum contacts" analysis), they typically do so by examining whether
jurisdiction exists either at the time the cause of action arose, the time the suit was filed, or
within a reasonable time prior to the filing of the lawsuit. See, e.g., Johnson v. Woodcock, 444
F.3d 953, 955-56 (8th Cir. 2006); Central States, Se. & Sw. Areas Pension Fund v. Phencorp

Reinsurance Co., Inc., 530 F. Supp. 2d 1008, 1016-17 (N.D. Ill. 2008); see also Phi/a. Prof'!

12

Collections, LLC v. Young, Civil Action No. 10-cv-00724, 2010 WL 5257651, at *3 & n.51
(E.D. Pa. Dec. 22, 2010) (refusing to consider, in engaging in a personal jurisdiction analysis
regarding a suit filed in 2010, contacts relating to a party that had been discussed by another
court in a prior suit, where those contacts dated from 2006 or before). Plaintiff does not explain
how utilization of the alter ego theory is appropriate here to satisfy the personal jurisdiction
inquiry, where it is undisputed that Newport News Shipbuilding-2 has not been HII's parent for
nearly a decade prior to the filing date of this suit.
Second, even if for some reason the above analysis is incorrect, Plaintiff has not
sufficiently demonstrated that the record evidence supports utilization of the alter ego theory.
That is, Plaintiff puts forward a notable lack of evidence from which the Court could conclude
that Newport News Shipbuilding-2 (or, for that matter, Newport News Shipbuilding-I) had "no
real separate identity from" HII and its predecessors-in-name, or that the circumstances relating
to the association between those entities and HII sound in fraud or inequity. There is literally no
evidence of record regarding, for example, HII's capitalization, its solvency, whether it shared
officers or directors with its former parent, whether it otherwise observed corporate formalities
distinguishing it from the parent, whether the parent misused its funds, or whether in any other
way HII functioned as a "facade" for the parent under controlling law. And there is no allegation,
let alone citation to evidentiary proof, to suggest that there was fraud or its equivalent afoot in the
relationship amongst the two entities.
The only evidence that Plaintiff has pointed to at all in support of the theory is the content
of the press release attached to the October 2001 SEC Filing. She asserts that because in the
release, Newport News Shipbuilding-2 stated, inter alia, that it "designs and constructs" aircraft

13

carriers for the U.S. Navy, (DJ. 256, ex. 2 at 8), this amounts to an "admission" that it "was
responsible for the huge shipbuilding operation [ofHII] in Newport News, VA[,]" (D.I. 256 at 5).
Yet as Defendant notes, a statement like this in an SEC filing-in which a parent corporation is
in some way consolidating by description its subsidiary's efforts and its own-is not atypical,
and certainly does not suggest that, via fraud or its equivalent, the parent corporation has become
indistinguishable from the subsidiary. Cf In re Chocolate Confectionary Antitrust Litig., 602 F.
Supp. 2d 538, 570-71 (M.D. Pa. 2009) (finding that alter ego theory could not be invoked, where,

inter alia, statements in annual reports indicated that corporate parents and subsidiaries
cultivated a "unified global image[,]" as the evidence failed to demonstrate "the corporate
parents' actual control over the daily affairs of their subsidiaries"); Calvert v. Huckins, 875 F.
Supp. 674, 678-79 (E.D. Cal. 1995) (rejecting alter ego theory and noting that consolidating the
activities of a subsidiary into a parent's annual reports is a "common business practice"); Case

Fin., Inc., 2009 WL 2581873, at *4-5 (rejecting alter ego theory where a parent filed
consolidated financial statements with the SEC, which included the subsidiary's results).
For these reasons, Plaintiff has failed to make out a prima facie case-or anything close
to one-that it could satisfy the requirements of the Delaware long-arm statute (or for that matter,
the requirements of due process) by invoking the alter ego theory. See, e.g., C.R. Bard Inc. v.

Guidant Corp., 997 F. Supp. 556, 560 (D. Del. 1998) (finding alter ego doctrine inapplicable
where the plaintiff had not produced any evidence of fraud in the corporate structure of the
subsidiary and the parent, and did not claim that the two entities had ignored the formalities of
separate corporate status); Pauley Petroleum, 239 A.2d at 633 (refusing to find that a parent
corporation should be treated as the alter ego of its subsidiary where there was no showing in the

14

litigation of fraud or of the other elements that would authorize the disregard of the separate
corporate entities).

2.

Hll's Own Actions/Contacts

Although Plaintiff does not argue it in its briefing, for the sake of completeness, the Court
considers whether there is any evidence that as to HII itself, the requirements of the Delaware
long-arm statute or due process have been satisfied. There is not.
As to the Delaware long-arm statute, there is no evidence to suggest that HII could satisfy
subsections (c)( 1), (2) or (3 ), all of which require a showing of specific jurisdiction. See
Registered Agents, Ltd. v. Registered Agent, Inc., 880 F. Supp. 2d. 541, 545 (D. Del. 2012). That

is, the invocation of these statutory sections "require[s] a 'nexus' between the plaintiffs cause of
action and the conduct of the defendant that is used as a basis for jurisdiction." Telcordia Techs.,
Inc. v. Alcatel S.A., No. Civ.A 04-847 GMS, 2005 WL 1268061, at *2 (D. Del. May 27, 2005).

The statutory language is as follows:
(c) As to a cause of action brought by any person arising from any
of the acts enumerated in this section, a court may exercise
personal jurisdiction over any nonresident, or a personal
representative, who in person or through an agent:
( 1) Transacts any business or performs any character of work or
service in the State;
(2) Contracts to supply services or things in this State;
(3) Causes tortious injury in the State by an act or omission in this
State ....
10 Del. C. § 3104. There is no allegation or evidence that as to Plaintiffs asbestos-related causes

of action, any of these three subsections could be met. It is not clear whether Plaintiff was
attempting to satisfy one of these subsections with its assertion in the Fourth Amended
15

Complaint that HII "supplied a ship which [it] knew or should have known would travel
throughout the world including but not limited to Delaware." (D.I. 380

at~

4) But with no

evidence indicating what "ship" Plaintiff is talking about, whether any such ship did, in fact
travel to Delaware, or what that has to do with the claims at issue, the reference becomes a
nullity. And indeed, Plaintiff does not make reference to this statement in its briefing.
Nor is there any evidence to suggest that HII fits within the bounds of subsection (c)(4) of
the Delaware long-arm statute, which provides for general jurisdiction. See Reach & Assocs.,
269 F. Supp. 2d at 505. Although the subsection authorizes jurisdiction even when the tortious
acts and the injury occurred outside of Delaware, the defendant or its agent must still be
'"generally present"' in the state. Id. As stated in this subsection, a general presence requires
that the defendant or its agent "regularly does or solicits business, engages in any other persistent
course of conduct in the State or derives substantial revenue from services, or things used or
consumed in the State[.]" 10 Del. Code§ 3104(c)(4). "While seemingly broad, the standard for
general jurisdiction is high in practice and not often met." Reach & Assocs., 269 F. Supp. 2d at
505.
The record is clear that HII is, and has been for its existence, a Virginia corporation. 7
And there is no evidence of record that indicates that HII has done or currently does any business

7

Plaintiff did provide an exhibit from the Delaware Department of State showing
that a "Newport News Shipbuilding and Dry Dock [sic] Company" was incorporated in Delaware
on December 5, 2008. (D.I. 256 at 5 n.6 & ex. 3 at 3) Although that corporate name is the same
one as the name that HII went by from 1886 to 2008, the record is now clear that the entity
incorporated on December 5, 2008 is a different, separate entity that is not connected to HII or its
operations--one established only to preserve a corporate name that was no longer being used by
the entity that later became HII. (Helpinstill Aff. ~ 3; Helpinstill Aff. II at~ 8-12)
16

in Delaware, engages in any conduct in the State or derives revenue from in-State activity. 8
Indeed, the entirety of the evidence on this point, provided by HII, is that it has no such contacts
with Delaware. (See, e.g., Helpinstill Aff. at iii! 7-14)
Since Plaintiff could not satisfy the requirements of the Delaware long-arm statute as to
HII, there is no need to separately address whether due process could be satisfied. But as a
practical matter, because the Delaware long-arm statute confers the identical scope of jurisdiction
as does the Due Process Clause, asserting personal jurisdiction over HII would offend due
process for the same reasons as described above. See Registered Agents, Ltd., 880 F. Supp. 2d. at
547.

B.

Jurisdictional Discovery

The Court has above articulated how Plaintiff has come forward with a paucity of
evidence to suggest, under any theory, how there is personal jurisdiction over HII. Its inability to
put forward "some competent evidence" that personal jurisdiction over HIT might exist, Hansen,
163 F.R.D. at 475, leads to the inevitable conclusion that its request for jurisdictional discovery
is the equivalent of a "fishing expedition[.]" Euro.fins Pharma, 623 F.3d at 157. Put a different
way, as to even the one theory (the alter ego theory) that Plaintiff presses in her briefing, the
Court has no real meaningful evidence to suggest the theory would or should apply. In such a
case, jurisdictional discovery on the question would be premised on little more than

The fact that in the Fourth Amended Complaint, Plaintiff asserted, without any
factual specificity in support, that HII "is a foreign business entity doing business in the State of
Delaware[,]" (D.I. 380 at ii 4), is insufficient to provide any support for jurisdiction here. See
Reach & Assocs., 269 F. Supp. 2d at 505 ("Thus, the Court concludes Plaintiffs' recitation of the
standard for the Delaware long-arm statute in their Complaint, without any factual specificity as
to the acts that support such an allegation, is not sufficient to confer jurisdiction under
Subsection (c)(4) of the Delaware long-arm statute."); see also Hansen, 163 F.R.D. at 476.
17

speculation-and speculation is an insufficient basis on which to order such relief. See Mass.

Sch. of Law, 107 F.3d at 1042.

IV.

CONCLUSION
For the reasons set out above, the Court recommends that HII's Motion be GRANTED.
This Report and Recommendation is filed pursuant to 28 U.S.C. § 636(b)(l)(B), Fed. R.

Civ. P. 72(b)(l), and D. Del. LR 72.1. The parties may serve and file specific written objections
within fourteen (14) days after being served with a copy of this Report and Recommendation.
Fed. R. Civ. P. 72(b). The failure of a party to object to legal conclusions may result in the loss
of the right to de novo review in the district court. See Henderson v. Carlson, 812 F.2d 874, 87879 (3d Cir. 1987); Sincavage v. Barnhart, 171 F. App'x 924, 925 n.1 (3d Cir. 2006).
The parties are directed to the Court's Standing Order for Objections Filed Under Fed. R.
Civ. P. 72, dated October 9, 2013, a copy of which is available on the District Court's website,
located at http://www.ded.uscourts.gov.

Dated: December 3, 2014
Christopher J. Burke
UNITED STATES MAGISTRATE JUDGE

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